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S Split Corp. (the "Company"), is a split share corporation offering an investment in the common shares of The Bank of Nova Scotia through its Class A Shares and Preferred Shares.
The Company will hold a portfolio of common shares of the The Bank of Nova Scotia ("BNS Shares"). Investors in the Company's Class A Shares will receive leveraged exposure to the performance of The Bank of Nova Scotia, including increases or decreases in the value of BNS Shares and increases or decreases in the dividends paid on BNS shares. Investors in the Company's Preferred Shares will receive monthly distributions on a fixed, cumulative and preferential basis.
Tax-Deferred Exchange Option for BNS Shares
Purchasers may purchase either:
- Class A Shares and Preferred Shares together in Units (consisting of one Class A Share and Preferred Share)
or
- Class A Shares only
by an exchange of freely tradeable BNS Shares on a tax-deferred basis.
Purchase of Units: The number of Units issuable in exchange for BNS Shares will be determined by dividing the volume weighted-average trading price of BNS Shares on the TSX during the three consecutive trading days ending April 25, 2007 by $25.00 (being the sum of the price of one Class A Share and one Preferred Share).
Purchase of Class A Shares Only: The number of Class A Shares issuable in exchange for BNS Shares will be determined by dividing the volume weighted average trading price of BNS Shares on the TSX during the three consecutive trading days ending April 25, 2007 by $15.00 (the price of one Class A Share). Purchasers will also receive $0.01 in cash per Class A Share, and the exchange ratio for Class A Shares will be adjusted to reflect the $0.01 per Class A Share.
The Company will issue a press release after the close of business on April 25, 2007 announcing the exchange ratios for BNS Shares. These exchange ratios are required for the tax election process, as they will determine the total number of S Split Shares to be received by multiplying the exchange ratio by the number of BNS Shares tendered for exchange.
The deadline for reorganization departments to receive instructions from investment advisors to deposit BNS Shares under the Exchange Option may vary by dealer.
Procedure For Tax Election
Eligible purchasers who wish to exchange shares on a tax-deferred basis must submit to the Company a signed and completed Tax Election Package no later than 30 days following the closing of the Offering (the "Election Deadline").
The Tax Election Package consists of:
- Two copies of the appropriate Tax Election Form
- A set of general instructions
Any purchaser who utilizes the Exchange Option but does not submit a duly completed Tax Election Package by the Election Deadline will still receive Shares of the Company but will have disposed of the BNS Shares exchanged on an immediately taxable basis and may be subject to a taxable gain or loss on those shares.
For the purpose of completing the tax election forms "Valuation Day" or (V-Day) refers to the valuation of the shares as of December 22, 1971.
Holders of BNS who wish to make a Tax Election should contact their own tax advisors for advice in respect of making the Tax Election and complying with the Tax Election Procedure having regard to their particular circumstances.
General Tax Election Instructions
Canada Revenue Agency
Where BNS Shares are not held by a Partnership or Co-owned
Where BNS Shares are Co-owned
Where BNS Shares are held by a Partnership
Province of Quebec Tax Election Forms
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